(영어번역자격증시험대비)Merrill Lynch Posts $4.9B Loss(08.07.18)

(NEW YORK) — Merrill Lynch & Co. on Thursday reported a $4.9 billion loss amid massive write-downs from soured mortgage positions and other risky investments, and unveiled plans to raise money by unloading assets.

The world's largest brokerage posted its fourth straight quarterly loss as it struggles to shore up a balance sheet battered by the global credit crisis. Merrill Lynch took $9.4 billion of charges and write-downs from mortgage-backed securities, unprofitable hedge positions, and residential mortgage exposure.

The new charges come on top of nearly $29 billion in write-downs that the New York-based brokerage had already taken because of tightening credit markets. Global banks and brokerages have been forced to take some $300 billion of write-downs in the past year.

Merrill also said it had reached a deal to sell its 20% stake in news and data provider Bloomberg LP for $4.43 billion, and is close to selling its controlling interest in Financial Data Services Inc. for upward of $3.5 billion.

"This was a difficult and disappointing quarter in terms of the bottom line," Chief Executive John Thain told analysts on a conference call. "But, in spite of this loss, we likely have in our last two quarter more than replaced the capital that we lost."

Merrill lost $4.89 billion, or $4.97 per share, after accounting for the payment of dividends for the three months ended June 30. That compares to a year-ago profit of $2.01 billion, or $2.24 per share. The broker reported negative revenue of $2.11 billion versus revenue of $9.46 billion a year earlier.

Analysts had expected that Merrill would lose $1.91 per share, according to Thomson Financial.

The results were swiftly panned by analysts and investors since the market expected significantly less write-downs during the quarter. The stock, which closed up 9.8% at $20.73 in regular trading, plunged in after-hours trading after the results were announced.

The debt-rating agency Moody's downgraded Merrill Lynch's debt within minutes after the results were released. Standard & Poor's affirmed the broker's ratings, though it had downgraded them just a few weeks ago.

Peter Nerby, an analyst at Moody's, said Merrill's options for selling assets or raising equity capital to offset losses "are now reduced given the difficult industry and capital markets environment."

Merrill reported $3.5 billion of losses from its exposure to collateralized debt obligations, which are financial instruments tied to mortgages. In addition, it lost $2.9 billion from wrong-way hedges it bought from bond insurers.

It also took another $1.7 billion in losses from its investment portfolio of its U.S. banks, and $1.3 billion in write-downs from exposure to residential mortgages.

It's OK to eat all kinds of tomatoes again, the U.S. government declared Thursday — lifting its salmonella warning on the summer favorites amid signs that the record outbreak, while not over, may finally be slowing.

Hot peppers still get a caution: The people most at risk of salmonella — including the elderly and people with weak immune systems — should avoid fresh jalapenos and serranos, and any dishes that may contain them such as fresh salsa, federal health officials advised.

Investigators still don't know what caused the salmonella outbreak, which now has sickened 1,220 people in 42 states — the earliest falling ill on April 10 and the latest so far on July 4.

But Thursday's move, coming as the tomato industry estimates its losses at more than $100 million, doesn't mean that tomatoes harvested in the spring are cleared. It just means that the tomatoes in fields and stores today are safe to eat, said Dr. David Acheson, the Food and Drug Administration's food safety chief.

"This is not saying that anybody was absolved," Acheson said. But, "as of today, FDA officials believe that consumers may now enjoy all types of fresh tomatoes available without concern of becoming infected with salmonella Saintpaul," the outbreak strain.

Early on, there was good evidence linking certain raw tomatoes to the sick, Acheson stressed. Yet inspectors haven't found the outbreak strain of salmonella Saintpaul on any farms, in suspect areas of south Florida and parts of Mexico, where they've managed to trace tomatoes thought eaten by patients.

As the outbreak stretched into last month, more evidence emerged against fresh jalapenos — the FDA's hottest lead for now. The agency sent inspectors to a Mexican packing house that supplied peppers linked to a cluster of those illnesses.

Also still on the suspect list is fresh cilantro.

There are signs that the outbreak is slowing, said Dr. Robert Tauxe of the Centers for Disease Control and Prevention. The CDC charted the dates when the ill say they fell sick. Between April and mid-May, illnesses steadily rose. Between May 20 and June 10, the outbreak hit a plateau, with about 33 people a day becoming ill. From June 11 to June 20, that dropped to 19 people a day becoming ill.

Those are the latest available statistics, because it can take two weeks or longer for the CDC to receive confirmation that someone who is sick actually has the implicated salmonella strain.

For every salmonella case the CDC confirms, it estimates there are 30 to 40 more that go undocumented, perhaps because people don't see a doctor or undergo the right testing.

How could two different types of produce be contaminated with what is a rare type of salmonella?

One possibility is that a large farm grew tomatoes in one section and peppers in another, and both went through a common washing station with contaminated water, Acheson said.

"Bear in mind this is not following the trail of a regular old produce outbreak," he said. "There's something else going on here that is a little unusual. You need to think outside the box."

The tomato industry — which held an unprecedented meeting with FDA Commissioner Andrew von Eschenbach and other officials on Monday — welcomed the announcement.

"We have long been confident that Florida's tomatoes were not associated with the salmonella Saintpaul outbreak," said the Florida Tomato Growers Exchange, whose farmers are deciding whether to start planting for a fall tomato harvest. "Tomatoes from Florida's growing regions have been gone from the marketplace for weeks, so they could not have been the source of the contamination."

In Monday's meeting, the industry urged FDA to share more details of its investigation so producers could offer more possibly helpful information. If the sick were more likely to fall ill from chain restaurants than mom-and-pop establishments, for instance, the industry could help point FDA toward different lines of suppliers, explained Kathy Means of the Produce Marketing Association. The FDA promised to consider the request.